Oregon tech employment hits 12-year high as software plays a growing role

Oregon tech jobs hit a 12-year high last month, driven upward by strong growth in software employment. But the pace of growth has eased considerably in the past few months.

The state had 60,900 people working last month in three key categories of tech employment: electronics manufacturing, software publishing and software design. That's according to state jobs data released Tuesday, which showed Oregon unemployment up slightly even as hiring heated up.

It's Oregon's highest point since August 2002, when the aftermath of the dot-com crash sent the state's tech sector into a malaise that lasted through the end of the decade.

Electronics manufacturing – computer chips, printers, circuit boards and digital projectors – have historically dominated Oregon technology, which traces its roots to test-and-measurement equipment developed by Tektronix in the years following World War II.

But that sector has ebbed, in Oregon and elsewhere, as most production moved to low-cost factories in Asia.

Although Intel has continued to grow in Oregon – its 17,500 Washington County workers are the most it has ever employed in the state, and more than any other business employs – other tech manufacturers by and large moved abroad, or drifted away altogether.

That put Oregon at a distinct disadvantage compared to hardware and web-oriented tech economies in the Bay Area and Seattle, and the state has struggled to replace the lost manufacturing jobs.

Gradually, though, Oregon developed a homegrown software sector built initially around open-source technology, which is free and open to modification by anyone. That helped spawn a generation of startups focused on emerging technologies such as cloud computing, mobile technology and social networking.

While these startups remain small, the pool of tech workers they helped spawn has renewed interest by big technology companies in making the state a low-cost outpost for everything from software engineering to customer service.

In the past few years Oregon has attracted major outposts for eBay, Salesforce.com, Airbnb, New Relic, Squarespace and – most recently – Aruba Networks. They come for the same reason manufacturers did in the '80s and '90s – relatively low operating costs, a talent pool and abundant real estate.

While startups take many years to build even 100 employees, a big company can hire dozens of workers for an outpost within a few months. So while Oregon's startups community remains relatively small, overall tech employment has been rising steadily.

Software now accounts for 40 percent of all Oregon tech jobs, up from just 25 percent as recently as 10 years ago.

(The state also calculates a broader measure of tech employment, which includes other categories of work, but those numbers are only available quarterly.)

Oregon tech work, which grew at an annual rate of more than 3 percent annually, slowed to less than 2 percent in the past three months – and just 1 percent last month.

It's too early to know whether that slowdown reflects a broader cooling in Oregon tech or whether it's a blip in the data.